Paul M. Jones

Following decades of welfare-state comfort and years of Keynesian stimulus spending, a panicky Europe is seeing the arrival of austerity politics. Resentful debtors such as Greece, Spain and Portugal are being forced into tax increases and spending cuts that are painful, unpopular -- and just beginning. Their resentful citizens throw tantrums and sometimes rocks at police. Resentful creditors such as Germany provide bailouts while wondering why they ever shackled themselves (and the value of their currency) to such irresponsible governments.

Those not resentful are scared.

...

And America is not exempt.

In 2009, the federal government spent $1.67 for every $1 it collected in taxes. The Obama administration's budget proposals would dramatically increase publicly held debt as a percentage of the economy over the next decade, eventually slowing economic growth, fueling inflation and making America more dependent on the kindness of creditors.

...

This can go on for only so long before a challenge more similar to Britain's becomes a fate more similar to Greece's. America is about to enter its own period of austerity, which is likely to be the dominant political reality for the next decade. The new game will have few winners and many losers.

I have only recently realized how horrifyingly bad the US debt situation is. I knew it was bad but I had no appreciation of just *how* bad. It overshadows every other political and social issue. Not only is the Federal government way in the hole, many of the States are as well.

via Michael Gerson - European and American debt crises signal an era of austerity.

Because *everybody* expects the Islamic Inquisition.

via Zombie » The New Free Speech Movement.

Given that it's nearly impossible for low-skilled immigrants to work in the United States legitimately, it's safe to say that a significant percentage of El Paso's foreign-born population is living here illegally.

El Paso also has some of the laxer gun control policies of any non-Texan big city in the country, mostly due to gun-friendly state law. And famously, El Paso sits just over the Rio Grande from one of the most violent cities in the western hemisphere, Ciudad Juarez, Mexico, home to a staggering 2,500 homicides in the last 18 months alone. A city of illegal immigrants with easy access to guns, just across the river from a metropolis ripped apart by brutal drug war violence. Should be a bloodbath, right?

Here's the surprise: There were just 18 murders in El Paso last year, in a city of 736,000 people. To compare, Baltimore, with 637,000 residents, had 234 killings. In fact, since the beginning of 2008, there were nearly as many El Pasoans murdered while visiting Juarez (20) than there were murdered in their home town (23).

El Paso is among the safest big cities in America.

Via The El Paso Miracle - Reason Magazine.

My guess is that the people in my audience had less formal education than my non-economist liberal friends, but they were more diverse and independent in their thinking. For these people, unlike my liberal friends, it is obvious why a "right to health care" is a misguided notion.

...

The political class does not want to take the Tea Party movement at its word. Instead, it wants to dismiss them as angry, bigoted, and ignorant. That is an obviously self-serving approach for the political class, and I think it is unfair.

When I discussed the knowledge-power discrepancy, which is the theme of Unchecked and Unbalanced, the audience understood. The political class does not. In that sense, in the conflict between the Tea Party movement and the political class, it is the political class that is in the wrong.

Impressions of Tea Partiers, Arnold Kling | EconLog | Library of Economics and Liberty.

Passage of the health care bill has sparked a revival of small-government thinking, causing many to predict significant Republican gains in Congress this fall. But despite some short-term success, this small-government revival is doomed to fail. The depressing truth is that the only way to regain the full measure of those freedoms proclaimed in our Founding Documents is for our current federal government to completely collapse under the weight of its own excesses.

Often, one carefully articulated analogy can succinctly convey a very complex idea. In our case, that analogy is addiction. Over the past hundred years, we have slowly allowed a monstrous system of dependence to develop until nearly every citizen relies upon government money, and thus is an addict. This has come about because the hard logic of the Founders has been replaced by the seductive ease of emotional arguments. All too often, the debate is over not if government should do something, but what it should do. This almost imperceptible shift in our national philosophy is a manifestation of our addiction.

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Detoxing America will cause social, political, and economic strife of a sort unimaginable, and yet it is a process we must endure. Hitting bottom is our only hope for a national rehabilitation. It is our only chance for a true reacquaintance with those principles that made this the greatest nation on earth: liberty, individual achievement, limited government, and the equality of opportunity.

(Emphasis added.) Via American Thinker: Let It Burn.

The debt crisis initiated by Greece’s near default has subsided for the moment because of a trillion dollar bailout package from the European Union and the International Monetary Fund.

This is only a temporary respite, however; debt crises will recur soon, in more virulent fashion, and they will affect not just Greece and the other less economically robust countries of Europe but the United States, the rest of Europe, and high-income countries like Japan.

The fundamental problems are the interactions between demographics, technological progress in medicine, and entitlement programs.

Tax increases will not fix things; only major cutbacks in entitlements can avoid fiscal collapse.

The Twilight of the Welfare State? - Room for Debate Blog - NYTimes.com.

AFTER SWEDISH CARTOONIST LARS VILKS was attacked in a theater last week for showing ten seconds of a provocative film offensive to Muslims, his house was set ablaze over the weekend.

via Instapundit » Blog Archive.

BERNIE MADOFF	SOCIAL SECURITY
Takes money from investors with the promise that the money will be invested and made available to them later	Takes money from wage earners with the promise that the money will be invested in a "Trust Fund" and made available later.
Instead of investing the money Madoff spends it on nice homes in the Hamptons and yachts.	Instead of depositing money in a Trust Fund the politicians use it for general spending and vote buying.
When the time comes to pay the investors back Madoff simply uses some of the new funds from newer investors to pay back the older investors.	When benefits for older investors become due the politicians pay them with money taken from younger and newer wage earners to pay the geezers.
When Madoff's scheme is discovered all hell breaks loose. New investors won't give him any more cash.	When Social Security runs out of money they simply force the taxpayers to send them some more.
Bernie Madoff is in jail.	Politicians remain in Washington .

via Institute for Truth in Accounting - Blog.

The paper How Complex Systems Fail by Richard Cook should be required reading for anyone in programming or operations. Hell, it should be required reading for most everyone. You should read the whole paper (it's very short at under five pages), but here are the main points:

1. Complex systems are intrinsically hazardous systems.
2. Complex systems are heavily and successfully defended against failure.
3. Catastrophe requires multiple failures – single point failures are not enough.
4. Complex systems contain changing mixtures of failures latent within them.
5. Complex systems run in degraded mode.
6. Catastrophe is always just around the corner.
7. Post-accident attribution accident to a ‘root cause’ is fundamentally wrong.
8. Hindsight biases post-accident assessments of human performance.
9. Human operators have dual roles: as producers & as defenders against failure.
10. All practitioner actions are gambles.
11. Actions at the sharp end resolve all ambiguity.
12. Human practitioners are the adaptable element of complex systems.
13. Human expertise in complex systems is constantly changing
14. Change introduces new forms of failure.
15. Views of ‘cause’ limit the effectiveness of defenses against future events.
16. Safety is a characteristic of systems and not of their components.
17. People continuously create safety.
18. Failure free operations require experience with failure.

Points 2 and 17 are especially interesting to me. It's not that people can build complex systems that work; instead, it is that people have to actively prevent system failure. Once you stop maintaining the system, it begins to fail. It sounds like thermodynamics; without a constant input of energy from people, the mostly-orderly complex system will descend into increasing disorder and failure.

James Madison would have to revise--or possibly burn--Federalist No. 10 if he were forced to account for the new phenomenon of the government itself becoming the faction decisively shaping its own policy and conduct. (See “Madison’s Nightmare” in City Journal’s 2009 special issue, “New York’s Tomorrow.”) This faction dominates because it’s playing a much longer game than the politicians who come and go, not to mention the citizens who rarely read the enormous owner’s manual for the Rube Goldberg machine they feed with their dollars. They rarely stay outraged long enough to make a difference.

via The Big-Spending, High-Taxing, Lousy-Services Paradigm by William Voegeli, City Journal Autumn 2009.